(AFP) – The Lebanese government called Tuesday on Lebanon's two mobile phone companies, Cellis and Liban-Cell, to cancel a 5 percent price rise introduced on July 1, the official ANI news agency reported.

Posts and Telecommunications Minister Issam Naaman justified the call by the economic problems of ordinary Lebanese and the far bigger than forecast profits the two companies had made since 1994.

The government and the phone companies have been at loggerheads for several months, since the authorities claimed $300 million from each in April, saying they had broken their contracts.

In response the companies proposed to change a 12-year build, operate, transfer deal into a 20-year licensing arrangement with immediate effect. Cellis, 67 percent owned by France Telecom, proposed to buy such a licence for $1.35 billion.

LibanCell, which has a 14 percent Finnish stake, said it would do the same, but the Lebanese government turned down the proposals, saying it would pursue legal action against both firms and invite international tenders for a new generation mobile phone system.